Crisis? What frickin crisis?

from progarchive.com

from progarchive.com

‘Crisis? What crisis?’ is a headline from 30 years ago, but it could have been written last week. It works both in its original sense (‘I see no crisis, my good man. Hand me my sherry,’) and a more contemporary one (‘When you say “crisis”, are you talking about the commodities crisis, the bad debt crisis, the leadership crisis or another crisis? Hand me that gin, will you?’).

The banking crisis, (not to be confused with the credit, housing market or food crises) is being sold as a crisis, to be sure, but a temporary, limited one — a glitch. As the media and government tried desperately last week to find someone to blame, all ignored one simple fact: this sort of thing has all happened before. Bubbles (be they of the housing-market, bad credit, commodities or South Sea variety) burst. It’s what they do.

Cycles of ‘boom and bust’ are not glitches. They are inherent to our economic system and repeat over the decades with depressing (excuse the pun) regularity, like a macro-economic Groundhog Day, beneath whose graph-curves lie the millions dumped into joblessness, poverty and despair with each depression. Blaming the ‘City trader spivs’ as the multinational-owned tabloids have hypocritically done, is not entirely fair. Blaming governments who are taught to fear regulation, not only by capitalist economists but by direct threats of withdrawal by mega-corporations, is also a little unjust. Even blaming the mammon-worshipping, self-serving, short-term-thinking banks is missing the mark.

Because it is the system itself that is the problem. It encourages over-consumption, leading to environmental devastation. It programs blind greed into the DNA of its dominant institution, the corporation. Through unjust, yet unquestioned practices like the charging of rent and interest, reward is demanded for no work. And as in a game of Monopoly, it concentrates ever larger amounts of wealth in the hands of those who ‘own’ land, a gift from God no less fundamental than air, rain, or the planet itself. If we think that ‘the market’ can, with a few regulations, solve a problem that is created by capitalism, the system that spawned it in its current, all-powerful form, then we have misunderstood how flawed the market is as a mechanism for anything but wealth-creation for a minority in this system. We have misunderstood contemporary globalised capitalism.

Its foundation, Adam Smith’s belief that a market-based economy will self-regulate by means of an ‘unseen hand’, is untrue in any moral sense. Massive interventions are regularly needed to prevent that ‘hand’ from crushing the vast majority of ordinary people.

The ‘spivs’, the bankers, the short-selling traders are all just expressions of a system that is built on self-interest and powered by greed. That’s capitalist theory speaking, not me. The question Christians (and all thoughtful people who care about the common good) should be asking right now is how many Keynesian interventions do we need to make, how many depressions must happen (always curiously just outside of living memory), before we take the attitude to this flawed system that we took to Communism? You hear it whenever Leftist politics are discussed: ‘it’s a lovely theory, but in practice, it doesn’t work.’ Tell me: looking at last week’s news, does our current system look like one that ‘works’, practically or not?

Christians, with our thirst for justice and tolerance for hard truths, should, along with the likes of EF Schumacher, Herman Daly, the New Economics Foundation, The School of Economic Science and the Henry George Foundation, be at the forefront of exploring new and better systems, while people are scared enough not to be complacent and disillusioned enough to be open to change.

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